Bayer: Crop Science Realignment
The US Supreme Court’s latest decision has relieved Bayer of an enormous burden. By a 7-2 vote, the justices ruled that federal approval requirements preclude state-level lawsuits over the lack of cancer warnings. For the Leverkusen-based company, this means a significant reduction in legal risk. This could render approximately 61,000 pending glyphosate lawsuits moot. The operational recovery is evident in the first-quarter figures. Revenue rose by 4.1% to EUR 13.4 billion, while EBITDA before special items increased by 9%.
The realignment of the Crop Science division is in full swing. At its core is a five-year program aimed at achieving an EBITDA margin in the mid-20s by 2029. The consolidation of the US glyphosate business into the independent unit Ruveon is intended to create greater agility in a market dominated by generics. At the same time, low-margin businesses with sales of up to EUR 500 million are being divested or shut down. The sites are being realigned. The Frankfurt site will be phased out by the end of 2028, while Monheim will be strengthened as a research and development center.
Despite strategic progress, the financial situation remains tense. Net financial debt climbed to over EUR 32.5 billion by the end of March, and free cash flow slipped into negative territory. For 2026, the Executive Board anticipates cash outflows of EUR 5 billion related to litigation. The key question for investors is: when will Bayer be able to return its cash flow to positive territory once the major legal proceedings are concluded? If the plan to largely resolve the legal disputes by the end of 2026 succeeds, the freed-up funds could be used to reduce debt. The stock is currently trading at around EUR 51.34.
MustGrow Biologics: The Power of Mustard and a Tailwind from Bayer
Agriculture is facing a fundamental transformation. Synthetic chemicals and fertilizers are coming under increasing regulatory pressure, while demand for natural alternatives is rising rapidly. MustGrow Biologics, based in Saskatchewan, has specialized in the potent defensive compounds of the mustard plant—and with great success. The technology has undergone a remarkable evolution. Bulky mustard meal, which required more than one metric ton per hectare, was transformed through an extraction process into a highly concentrated product that can be applied using conventional application systems. No farmer needs to purchase new equipment.
The decisive breakthrough was validated through a partnership with Bayer. The agrochemical giant tested TerraMG, a biological crop protection product, against synthetic products for two years and is now investing an estimated USD 35–40 million in development and approval, according to MustGrow. The biological product combats soil-borne diseases with efficacy comparable to synthetic chemicals, while maintaining a rapid 72-hour half-life. For MustGrow, this is not only a seal of approval but also opens the doors to the most important agricultural markets in Europe, the Middle East, and Africa.
At the same time, the company is independently marketing TerraSante™, an organic, mustard-derived biofertility product, in the US. The field data is impressive. For example, on an organic potato field in Washington, a farmer achieved an additional yield of around 2 tons per acre with an application rate of roughly 11 to 12.33 kg per hectare. Thanks to word of mouth, the product even sold out last year. The most recent capital increase of CAD 3.7 million is intended to secure production so that there will be no further bottlenecks this year. The annual shareholders’ meeting re-elected all directors with over 98% of the vote. With an estimated market volume of about USD 350 billion by 2032 and annual growth of 12–15% in the organic segment, the potential appears substantial. The share is currently trading at around CAD 0.385.
Yara International: Undergoing Strategic Restructuring
The current situation in the fertilizer market resembles a roller coaster ride. In the short term, Yara is benefiting from the massive disruptions caused by the Hormuz blockade, which is paralyzing about one-third of global seaborne urea trade. The Q1 2026 figures, showing a 40% increase in EBITDA to USD 896 million, are impressive, but they are based on an exceptional geopolitical situation. Now that the waterway is passable again, analysts expect demand in Europe to decline by up to 10%. The approximately 1 million metric tons of stranded cargo could then put additional pressure on prices.
The timing pattern is interesting. While Yara CEO Svein Tore Holsether still speaks of operational resilience, firms such as Jefferies downgraded their rating from “Buy” to “Hold” in June. The price target fell from NOK 610 to 470. Nordea even rated the stock “Sell” with a price target of NOK 390. The current price of around NOK 433 reflects this skepticism. The valuation metrics show a doubling of the return on invested capital to about 12.2%, but the question remains whether these metrics are sustainable once the one-time geopolitical effect wears off.
At the same time, Yara is driving its transformation forward. The multi-billion-dollar Texas deal for an ammonia plant strengthens its US presence and reduces dependence on European natural gas. However, the failed Louisiana project shows that capital discipline takes priority.
The partnership with Air Products for green ammonia from NEOM and the zero-emission ship “Yara Eyde” are strategic steps toward a lower-carbon future. The company has proven its resilience in crises.
The fertilizer market crisis is a wake-up call for investors. Bayer is leveraging its legal tailwind to advance a group-wide restructuring effort, although its long-term success still depends on resolving billions of dollars in legacy liabilities. MustGrow Biologics, with its mustard-based technology, may offer one of the most compelling solutions to the fertilizer and chemical challenge, while also benefiting from its partnership with Bayer. Yara International, meanwhile, is enjoying short-term geopolitical tailwinds but continues to face analysts’ skepticism over the sustainability of the current boom. Three companies, three different strategies—but the biological approach appears to offer the greatest long-term potential.
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